Red Reef Laboratories International, Inc. (Pink Sheets:RRLB) and JDM Capital Corp. recently announced the formation of JDM Reef Capital Management, LLC, a joint venture poised to purchase environmentally distressed buildings, green them up in order to increase their market value and then sell them. According to JDM's president, "The bottom line is to create profitability while leaving the assets and our environment in a better place than we found it." LEED certification will be sought for some of the properties. According to the press release, Red Reef Labs has a strong reputation for restoring healthy environments in properties that require restoration. Red Reef Labs is a specialized chemicals company dedicated to develop and apply advanced decontaminates for the remediation of polluted environments. Most Red Reef Labs' products are considered environmentally benign and human friendly when compared to some competitor's products, generally used in surface decontamination. On the other hand, JDM Capital Corp (NYC-based boutique real estate finance company) has the ability to thoroughly understand, analyze and creatively finance real estate projects...seems to me that this JV is strategically aligning itself to do some good things.
However, I am not totally convinced that a JV can be financially successful enough to warrant the thousands/millions spent on reclaiming the property to a workable condition. Once that has happened, then additional thousands/millions must be spent to build the structure to green standards. Maybe that is where JDM's experience in creative financing comes into play. Depending on the cost, if you can obtain favorable financing (100 year interest only loan-->just kidding) you can make a real estate project successful. Anyway, I am just trying to brainstorm a little bit-->it just seems to me that reclaiming a distressed property would be much more of a hassle and much more expensive than just finding a building in a great location or even starting from scratch...the key-->being able to avoid the cost that comes with making whole a structure that has been environmentally distressed. Comments welcome.